TEST BANK for Financial Accounting 7th Edition by Hanlon, Magee, Pfeiffer (2025)

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,ANSWERS .ARE .LOCATED .AT .THE .END .OF .THIS .DOCUMENT
SHORT .ANSWER. .Write .the .word .or .phrase .that .best .completes .each .statement .or
.answers .the .question.
1) Choose .the .appropriate .letter .to .match .the .characteristics .with .the .type .of .company.
.A .given .characteristic .may .match .more .than .one .type .of .company.
CHARACTERISTIC
1. Issues .shares .of .stock .that .are .traded .on .a .stock .exchange .such .as .the .NYSE
2. The .owner(s) .of .the .business .are .personally .liable .for .the .debts .of .the .company
3. Shares .of .stock .must .be .purchased .directly .from .current .owners .and .not .sold
.on .an .exchange
4. Can .raise .more .financial .capital .by .selling .stock .to .the .greatest .number
.of .investors
5. The .easiest .form .of .business .to .start
6. The .business .ceases .to .exist .upon .the .departure .of .one .of .the .owners
7. The .owner(s) .pay .taxes .on .the .profits .of .the .business
TYPE .OF .COMPANY
A. Partnership
B. Publicly .traded .corporation
C. Privately .traded .corporation
D. Sole .Proprietorship




Question .Details
AACSB .: .Analytical
.Thinking .AICPA .: .FN
.Reporting .Difficulty .: .2
.Medium . Bloom's .: .Analyze
Accessibility .: .Keyboard .Navigation
.Type .: .Static
Gradable .: .manual
Accessibility .: .Screen .Reader
.Compatible .Bloom's .: .Understand
Topic .: .Organizational .Forms
Learning .Objective .: .01-01 .Describe .various .organizational .forms .and .business .decision .makers.
.AICPA .: .BB .Legal
Source .: .Exclude .LearnSmart




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,2) Match .the .business .activity .to .the .appropriate
.category. .The .purchase .of .a .new .line .of .assembly
.equipment


Company .payment .of .a .dividend

.The .purchase .of .office .supplies


The .purchase .of .an .online .advertising .slot .time .by .the .company

.The .building .of .a .new .factory .facility


Company .repayment .of .the .principal .amount .of .a .bank .loan

A) Financing .activity
B) Operating .activity
C) Investing .activity




Question .Details
AACSB .: .Analytical .Thinking
.AICPA .: .FN .Reporting
.Difficulty .: .2 .Medium
Learning .Objective .: .01-02 .Describe .the .purpose, .structure, .and .content .of .the .four .basic
.financial .s .Topic .: .Financial .Statements
AICPA .: .BB .Resource
.Management .Accessibility .:
.Keyboard .Navigation .Type .: .Static
Gradable .: .manual
Accessibility .: .Screen .Reader
.Compatible .Bloom's .: .Understand
Source .: .Exclude .LearnSmart




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, 3) Choose .the .appropriate .letter .to .match .the .terms .to .the .blanks .below .to .complete
.the .relevant .equation .for .each .financial .statement.


FINANCIAL .STATEMENT .EQUATION
Balance .Sheet . =. +.
.Income .Statement . =. −.
Statement .of .Retained .Earnings . =. +. −.
.Statement .of .Cash .Flows . =. +. +. +.
.TERM
A. Cash .at .beginning .of .year
B. Net .cash .flow .from .operating .activities
C. Balance .of .retained .earnings .from .previous .year
D. Net .cash .flow .from .investing .activities
E. Liabilities
F. Net .cash .flow .from .financing .activities
G. Balance .of .retained .earnings .at .end .of .year
H. Net .income
I. Revenue
J. Assets
K. Stockholders' .equity
L. Expenses
M. Cash .at .end .of .year
N. Dividends .paid




Question .Details
AACSB .: .Analytical .Thinking
.AICPA .: .FN .Reporting
.Difficulty .: .2 .Medium
Learning .Objective .: .01-02 .Describe .the .purpose, .structure, .and .content .of .the .four .basic
.financial .s .Topic .: .Financial .Statements
AICPA .: .BB .Resource .Management
.Bloom's .: .Create
Accessibility .: .Keyboard .Navigation
.AACSB .: .Knowledge .Application
.Type .: .Static
Gradable .: .manual
Accessibility .: .Screen .Reader
.Compatible .Bloom's .: .Apply
Source .: .Exclude .LearnSmart



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